FOUR out of 10 Britons think their financial situation is set to get worse and nearly half are worried about the amount of debt they have, a survey suggests today.

Around 43% of people said they thought their finances would deteriorate during the coming six months, 13% more than in October 2010, according to insolvency body R3.

At the same time, 45% of people are worried about the amount they owe, with credit cards the main source of concern for 57% of people, followed by overdrafts at 27% and mortgage repayments at 25%.

Steven Law, president of R3, said: “Since we last carried out the survey, people have seen a rise in the cost of living, from the VAT increase, to the rise of fuel and utility costs.

“This has happened against a backdrop of pay freezes, pay cuts and, in some cases, redundancies, so it is understandable that many are feeling pessimistic about their financial outlook.”

A quarter of people are saving less than they usually do at the moment and 21% are putting off big financial decisions.

Around 13% of people think they will use their overdraft this month, while 44% of people think they will struggle to make it to payday. A further 8% of people admitted they were already falling behind with their bills, and the same proportion said they had taken on more debt than previously during the past few months.

Interest rates are expected to start rising again this year, but 28% of people who have a mortgage said they thought they would struggle to afford their repayments if they rose by £100 a month – the equivalent of a 1.25% rise in borrowing costs for someone with a typical £150,000 mortgage.

Mr Law said: “Christmas is a time of heavy spending for many individuals, so it is perhaps not surprising that the number of people concerned about their debts has increased since last quarter.

“Many people in Britain are already under pressure due to credit card debts, overdrafts and loans, and many have had to rely on these forms of credit to fund Christmas spending.

“This could explain why concerns about these types of debts have increased since previous quarters and why individuals have taken on more debts over the last few months.”